Almost 400,000 UK property transactions have been down valued in the last year alone, new estimates from Benham and Reeves have revealed.

Research from the lettings and estate agent has suggested that an estimated 390,285 homes have been down valued by surveyors working on behalf of mortgage lenders, who believe the price agreed by both buyer and seller was too high.

The South East is the region to have seen the most transactions hit by a down valuation, the research found. Of the 137,107 homes sold in the last 12 months, an estimated 60,327 are thought to have been down valued. Meanwhile, the North West has also seen some of the highest levels of value adjustments during the selling process, with 54,043 of the 96,506 homes sold in the last year being down valued.

At 59%, London is home to some of the largest levels of down valued homes of all UK areas and it also ranks third in terms of the volume of transactions impacted. The lettings agent estimated that 47,769 of the 80,965 homes sold across the capital in the last year would have been subject to a down valuation.

Benham and Reeves also calculated that the average property across the UK will take a hit of between £5,000 and £10,000 as a result of a down valuation. A mid-range drop of £7,500 would see the average UK property down valued by -2.8%.
 
“Down valuations can be a real thorn in the side of those eager to progress with a property transaction but unfortunately they are a prevalent occurrence within the UK property market,” commented Benham and Reeves director, Marc von Grundher.

“They often occur due to over expectant sellers setting their asking price too high but we’re also seeing more lenders request a greater degree of caution by valuers in a market where prices are climbing at a rate of knots.

“As a seller, you can look for a new buyer purchasing through a different lender and hope they agree on the value of your home. Or you can hold tight until values increase at the risk of losing your buyer or simply accept the lower value placed on your home.

“As a buyer, you can also negotiate with the seller or lower your offer, or you can get the property valued by a different surveyor and lender. Otherwise, you face getting a loan to cover the shortfall or bumping up your deposit to cover the cost.”

Share Story: